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naked option trading?

Discussion in 'General Trading & Investing Chat' started by Kumar ., Oct 11, 2017.

  1. Kumar .

    Kumar . Joy :)

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    Hi Option traders,
    does Nifty naked option trading/scalping intraday makes money?
    just a scalp for 4-5 points?

    possible?

    what other things one should keep in mind?

    thanks
     
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  2. traderniftybull

    traderniftybull Well-Known Member

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    You mean by buying naked options
    Why not possible. Its very much possible.

    - First and most important. Just check your greed in control.
    - Better to trade ITM or next ATM options.
    - Do not trade OTM/deep OTM options, unless you are sure that you will get your target within expiry.
    - Do not trade options on an event day, or get out of trade at right time. Now, what is right time, you will learn yourself, if you trade on an event day. :D
    - Be it known that the sale value of the option trade will be included in the total turnover (for IT purpose)
    - If you want to scalp, then you should take care of TO calculation, cost of trade (brokerage, taxes etc on a trade) etc.

    Just a few suggestions and not the method of doing it my way, so use your discretion.
    Also, one should know/aware of, what he is doing.
     
    Last edited: Oct 11, 2017
  3. Kumar .

    Kumar . Joy :)

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    These 2 points kindaa troublesome for me(after reading a thread on TO and traders getting IT notices).
    Reaching 2Crs TO with just 3-4 lots and regular scalps will get us there.
     
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  4. traderniftybull

    traderniftybull Well-Known Member

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    IMO
    A fool or a group of fools have framed the rules for option TO (who do not know abc of option trading), to include sell price of option, also for one who buys first and sells only to square off it.

    Highly ridiculous. :mad: :(
     
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  5. Raj232

    Raj232 Well-Known Member

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    Just one thing, that option trading is a dangerous game. Almost 99% of option buyers are in huge loss. Better play Futures or equities and once confident step into options arena. Options can be used mainly for hedging.. just my 2 cents.
     
  6. Subhadip

    Subhadip Well-Known Member

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    Be option seller...rather than option buyer..

    In buying one way of profit...say call....so if price goes up..that too..with great distance..within very short time. Then only profit.


    But put seller...price goes up..then also profit..price goes sideways then also..

    Think about it...
     

  7. traderniftybull

    traderniftybull Well-Known Member

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    Hope you have ever traded options.
    Yes, most of the option buyers are in loss but the reasons are different for their losses, not the instrument.
    BTW, what about future traders, you think all future traders make money in all of their trades..

    Okay do one thing.
    Compare option trading and future trading, and do mention their pros and cons point wise. Only then I will be able to contradict, most of the myths related with option trading.
     
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  8. traderniftybull

    traderniftybull Well-Known Member

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    And now for option writing

    An hype has been created or a myth has been spreaded that option writers always make money. Yes sometime both side option writers make money, when market is sideways (but the gains are rather small to very small) or on event days (and that too not always). Barring such a few days, option writers are also a loser, and most of the time their losses are bigger than an option buyer.

    Every one in the market knows that only one side will win a trade and make money, that is right side. So either call writer will make money or the put writer. Then how an option writer of other side will also make money. And one should know that in option writing gains are small in comparison of losses, which may be huge.
     
  9. Raj232

    Raj232 Well-Known Member

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    you are correct.., it is the same thing in different words .. "gains are small in comparison of losses, which may be huge." :)
     
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  10. simplebuthard

    simplebuthard Yet to break even !!!

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    As long as your SLs are placed in the system not in the mind, you will be fine.

    As long as your risk:reward is favourable for you considering your number of wins/loss ratio, you will be fine.

    Test the both of the points I mentioned, by playing option buying with small amount first for 2 months.
     
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